INTER OFFICE MEMO

Wednesday 17th June 2015/ Sha’aban 29, 1436.

From: Operation Division, Head Office,5-Bank Square The Mall, Lahore,Pakistan.

To: All, The Branches, The PunjabProvincial Cooperative BankLimited.

Subject: Zakat Deduction and Operational Process of Zakat Collection Account.

This is to advise that as per the notification No.CE-1001(36)/ NISAB/1435-36/2015 dated 16th

June, 2015 of Government of Pakistan, Ministry of Religious Affairs and interfaith Harmony,

“Nisab of Zakat” for the Zakat Year 1435-36 A.H is notified at Rs.33,461/- (Rupees Thirty Three

Thousand six hundred forty one only).

Zakat will be not being applicable on all, where customer has submitted Zakat Exemption

Certificate for all Muslims.

In any eventuality Zakat will not be deducted from Non-Muslims and undertaking on simple

plain paper will be enough in case religion column is not ticked in account opening form in case

of non-Muslims.

As per Manual on General Banking Volume-II Chapter, 17, Clause 17.2 points no (IV)& (V),

(VII), (IX),(X),(XI),(XII) &(XIII)

Zakat Collection Controlling Agency (ZCCA), means Our Head Office.

Zakat Collection Office (ZCO) means a branch of our bank actually responsible for deduction

/collection of Zakat.

CZF means Central Zakat Fund.

ZCR means Zakat Collection Report on Form CZ-07.

Review Application means a refund application submitted to the Reviewing Authority by an

account holder from whom Zakat has been deducted at source.

Reviewing Authority means Manager of the branch (ZCO) who shall be entitled to decide the

review applications up to Rs. 500/-.

Review applications in respect of claims over Rs 500/-shall be sent to head office.

Revision Application means a refund application by a claimant who is not satisfied by the decision

of the Review Authority and asks for revision by the Revising Authority.

Revising Authority - Authority that will decide on Revision Application.

All branches will open following two current deposit collection accounts:

"CZF COLLECTION A/C - SAVINGS"

"CZF COLLECTION A/C - OTHER ASSETS"

Following accounts are currently relevant to our branches for deduction of Zakat at source. For

complete assets First Schedule to the Zakat Ordinance and Zakat Collection and Refund Rules

1981 should be referred:

(I) Saving Bank Accounts and similar accounts, by whatever name described.

(II) Notice Deposit Receipts, and similar Receipts and Accounts, by whatever name described.

(III) Fixed Deposit Receipts and Accounts and similar receipts and accounts and certificates, by

whatever name described, on which return is receivable by the holder periodically or is

received before maturity.

(IV) Savings/deposit certificates (e.g. Defence Savings Certificates, National Deposit Certificates

receipts and accounts, by whatever name described, on which return is received by the holder

only on maturity or encashment.

Forms &Registers

The following forms/registers shall be used for the purpose of maintaining records of Zakat

Deductions and Refunds there against:

i. CZ-01: Savings and Similar Accounts Zakat Deduction/Refund Scroll: This will be a

computer report generated by BANKSMART system for deductions of zakat from PLS Savings

accounts. This report shall be checked and signed by the Officer Operation and Branch Manager

and kept as branch record after binding. Any refunds for the above deductions will have to be

entered under the prescribed columns in this report in red ink.

ii. In addition to the computerized report manual scroll on the enclosed format CZ-01 will be used

to maintain record of Zakat deducted from TDR accounts. Both these reports will be bound

together and kept as permanent record.

iii. CZ-02 Zakat Deduction/Refund Register for Assets Other Than Savings (Assets): This will

be a register in which branches shall open quarter-wise folios separately for each type of the

asset they are dealing in, with related asset code identification for recording Zakat Deductions

from assets.

iv. CZ-03 Zakat Certificate: In Zakat Certificates with counter foils will be in books of 100

leaves. These should be handled like security stationery. The counterfoils of used books shall be

retained in the branch as permanent record.

v. CZ-04 Zakat Refund Application Form (Review/Revision): Claims of refund of Zakat to be

lodged by the customer on this form.

vi. CZ-05 Zakat Refund Application Register: This will be a register in which all applications

received for refund of Zakat deducted in respect of all assets including Savings Bank Accounts

will be recorded in running serial number order. The serial number from the Register will also

be recorded on the Application and each document attached thereto.

vii. CZ-06 Zakat Refund Application Decision Advice (Review/Revision): This shall be used for

conveying decision to the claimant for Zakat refunds.

viii. CZ-07/08 Zakat Deduction/Refund Summary Report: This is a periodic report which shall

be prepared in triplicate as indicated in the report. Two copies duly signed should be sent to

Head Office (IT & OD) immediately after the end of the period to which it relates and one copy

to be retained by the branch.

ix. CZ-09: This form will be used by the branches for reporting of unrealized Zakat on annual

basis along with then- last report CZ-07 at the end of a Zakat year.

Bank Charges

There will be no charges levied on the Central Zakat Fund Collection Accounts for the services

provided by the bank branches in connection with the deduction/refund and remittance of funds

to Head Office.

Rounding Off Principle

The amount of Zakat due shall be rounded off to the nearest rupee, i.e. less than 50 paisas shall

be ignored and above 50 paisas shall be rounded to the next higher rupee. However, if the total

amount of Zakat due is less than a rupee, it shall all be ignored. As a consequence, the amount

of Zakat deducted will always be in whole rupees.

Limit of Zakat Deduction

Deduction of Zakat at source on any asset shall not exceed 2.5% of the value of that asset within

the same Zakat year.

Coordination

i. In view of the strict requirements of the Central Zakat Administration and the absolute necessity

of maintaining the time schedule, the branch managers MUST ensure that the entire activities

pertaining to the maintenance and closing of registers folios/scroll, preparation and submission

of reports, maintenance and balancing of accounts and the remittance of balances from the

collection accounts to the Head Office etc are carried out strictly in accordance with the

schedule laid down herein.

ii. AccountsDivision will coordinate with the branches on matters regarding

preparation/consolidation of returns concerning Zakat collections. All reports prepared by the

branches shall be sent to IT & OD who would arrange consolidation/submission of returns to

CZA and coordinate with Finance Division regarding deposit of collection with SBP.

Exemptions - Exclusion from Sahib-e-Nisab

i. The Federal Government, a Provincial Government or a local authority.

ii. A statutory corporation, a company or other enterprise, owned wholly, directly or indirectly, by

the Federal Government, a Provincial Government, a local authority or a corporation owned by

the Federal Government or a Provincial Government, either singly or jointly with one or more

of the other three.

iii. A subsidiary of a statutory corporation, a company or other enterprise referred to in sub-clause

(b).

The National Investment (Unit) Trust.

An ICP Mutual Fund.

A recognized Provident Fund.

Any Unit Fund maintained by the Defence Services, including the Civil Armed Forces,

A Zakat Fund or

An institution fund, trust, endowment or society registered as charitable organization under the

Societies Registration Act 1860 or a Company registered under section 26 of Companies Act

1913 and approved by CBR for purposes of section 47 of Income Tax Ordinance, 1979.

iv. A deeni madrasah registered as such by the Auqaf Department.

v. A mosque

vi. An orphanage registered as such under the law relating to orphanages.

vii. A Worker Participation Fund established under the Companies Profits (Workers Participation)

Act 1968

viii. Amount of a party to a suit or case kept with or under the orders of a court pending decision of

the suit or ease.

Zakat Deductible Assets

a) Saving Bank and Similar Accounts (Asset)

i. The branches should deduct Zakat on 1st Ramadan from all such Zakatable accounts, which

carry a credit balance exceeding amount as mentioned above. Zakat shall be calculated and

deducted on the entire balance standing to the credit of such accounts, which are liable to Zakat.

ii. The date of deduction as announced by the PPCBL for these assets shall be abank holiday (not

for staff). All activities in this respect regarding posting and reporting must be done on the same

day.

iii. The BANKSMART System automatically computes and deducts Zakat on PLS Savings Bank

Accounts and generates the report for Zakat Deducted as per performa CZ-01. Detailed

procedure on deduction of Zakat on PLS Saving Accounts has been given under the chapter on

PLS Savings Accounts.

iv. BANKSMART system will only handle Zakat Deductions from PLS Savings Accounts. Other

similar assets and TDR shall be handled manually and a statement as per specimen CZ-01

prepared as mentioned above. The manual statement and the report CZ-01 generated by the

system shall be kept together for ease of reference and records.

v. Branches are not required to send any specific intimation on Zakat deduction to the customers

as the dispatch of regular statements will be sufficient information to the client for which

statements of accounts of all PLS savings and similar accounts shall be sent to customer.

b) Other Assets

i. Notice Deposit Receipts / Accounts &Similar Accounts - Asset

Zakat shall be deducted at the time of encashment/withdrawal or at the time of payment of first

return (if any) whichever be earlier in a Zakat year on Notice Deposit Receipts which existed on

the morning of the Valuation Date of the Zakat year. Zakat is to be calculated on face value and

zakat deduction entry shall be recorded and included in the relevant folio of Register CZ-02.

The amount deducted shall be credited to the "CZF Collection Account Other Assets".

ii. FDRs &Accounts & Similar Receipts and Accounts Asset

a) If a Fixed Deposit Receipt Account provides for payment of return on periodical basis, Zakat is

chargeable on the face value of the receipt, as existing on the morning of the Valuation Date

in respect of each Zakat year, on the first return paid or on encashment/withdrawal,

whichever Is earlier. The amount of Zakat deducted shall be reported under Asset. Deduction of

Zakat on ABCs will fall under this category.

b) If the term of TDR/Account provides for payment of return on maturity/encashment, zakat is

chargeable only once at the time of the payment of maturity/encashment value. The amount of

zakat shall be calculated on the payable value of the TDRs, as existing on the morning of the

Valuation Date of that Zakat year, the amount of zakat deducted shall be reported under Asset.

Should the account holder of such a TDR (where the return is payable on maturity) asks for the

payment of interim return, Zakat shall be deducted in respect of that zakat year. On this

occasion zakat shall be calculated on the face value of the FDR as on the morning of the

Valuation Date of that Zakat year. The amount of zakat deducted shall be reported under other

Asset. Subsequently, if the TDR is encashed in the same Zakat Year, the total amount of Zakat

due on the TDR will be calculated in the usual manner on the payable value as on the morning

of the Valuation Date of that Zakat Year at the time of payment of interim return, the balance

amount of Zakat will be deducted and reported under other Asset and in case FDR is encashed

in any subsequent Zakat Year the amount of Zakat due will be calculated on the payable value

and the full amount of Zakat due shall be recovered without taking into consideration the

amount of Zakat deducted in any previous Zakat Year. Such deductions shall be reported under

other Asset, Zakat deduction entry shall be made and initialed in the relevant folio of the

Register CZ-02 and the amount of Zakat shall be credited to CZF Collection. Account - Other

assets.

Exemptions from Compulsory Deduction of Zakat

i. Non-Muslims

The fact of a person being non-Muslim should be established through the record available with the

branch or a solemn affirmation in writing of the person concerned.

ii. Non-Pakistanis

The fact that an individual is not a citizen of Pakistan to be established through an attested true

photocopy of the passport or equivalent document establishing his nationality, accompanied by

a solemn affirmation in writing to the effect that he is not a citizen of Pakistan.

iii. Companies with Majority Ownership of Non-Muslims

In case of Companies / other associations of persons or body of individuals, where not less than

fifty percent of the value of its shares is owned by or the beneficial ownership of individuals,

where not less than fifty percent of the value of its shares is owned by or the beneficial

ownership thereof is held in the names of individuals who are not Muslim citizens of Pakistan

may claim exemption through a solemn affirmation in writing, together with the requisite

details, to be given by its principal Executive in Pakistan.

iv. Faith and Fiqh

a) Exemption from deduction on grounds of faith and fiqh may be claimed by filing a declaration

with the branch, on form CZ-50 or an attested true copy thereof, within a period not less than

thirty days preceding the Valuation Date. The declaration or the attested copy thereof filed as

aforesaid in one Zakat year shall be valid for so long as the declaration or its copy, and the asset

liable to Zakat to which it relates, remain in the custody of the same branch.

b) The declaration may specify the detailed particulars of the asset in respect of which exemption

is claimed or specify the asset in the manner described in the First Schedule to the Ordinance, In

the later case, the true copy of the declaration shall be accompanied by a letter in which the

detailed particulars of the asset shall be specified. If an attested true copy of the declaration has

already been filed with the branch in relation to some other asset and exemption is claimed in

respect of a new asset, only a letter as above with additional information indicating the

particulars of the previous asset in respect of which attested true copy of the declaration had

already been filed, shall be given to the branch before the Valuation Date. It means that every

asset which bears a separate serial number or account number shall be treated as a separate and

a new asset in relation to a previous asset held by the branch, even though both assets relate to

the same serial number of the First Schedule to the Ordinance,

c) The declaration, on form CZ-50, may be sworn by a citizen of Pakistan residing in a foreign

country before an authorized diplomatic or consulate officer of Pakistan in that foreign country.

d) Declarations (CZ 50)submitted by the asset holders at the time of creation of the assets shall

be thoroughly checked in respect of account number, signatures and addresses of the

witnesses, Code Number, particulars of the accounts details of the asset, signature of the

deponent and submission of declaration at least 30 days prior to the Valuation Date etc. If

any defect in the declaration is detected by the ZCO the same may be got corrected

according to the law before accepting the declaration.

e) A check-list provided by CZA regarding CZ-50 is reproduced below for guidance of

branches:

Ensure that declaration is on Rs.20/- stamp Paper,

Declaration under Sub Section 3 of Section 1 of Zakat and Ushr Ordinance, 1980

(XVIII of 1980) and Rule 20 of the Zakat (Collection and refuned) Rules 1981,

sworn on oath as per prescribed specimen.

Name of the particular FIQH,

Name and particulars of assets in which exemption is required in general or specific

terms. If the description is given in general terms, it should be accompanied with a

letter specifying the assets (registration No, /Account No and type of the same).

Signature of the deponent. (There should be no difference in the signature on the

purchase/account opening application and that on the declaration).

Date & Place of execution.

Name and complete address and signature of the first and second witness.

Stamp and signature of the authority administering the Oath.

Place and date of Oath.

Name of father or husband of the deponent.

Age of deponent,

Complete address of the deponent.

v. Ensure that declarations are accounted for in the register properly and kept in safe custody.

vi. In case of joint Accounts ensure that shares are pre-specified in the purchase

application/Accounts Opening Forms.

vii. To avoid the Audit objections of State Bank of Pakistan branches are advised to thoroughly

check declarations submitted by the customers at the time of opening of account or

subsequently, in the manner as prescribed under the Rules/Zakat &Ushr Ordinance.

viii. The submission of declaration should be, at the most, 30 days prior to the Valuation Date. In

case of any defect detected in the declaration the same should be got corrected before accepting

the same.

ix. In case, the recovery of Zakat in respect of any asset mentioned in First Schedule is not made or

the exemption has been given against an invalid & defective declaration (CZ-50) the amount of

Zakat due under the law, shall be recovered from the delinquent staff of the concerned branch.

x. Zakat not to be deducted in respect of the assets of persons excluded from sahib-e-nisab:

Zakat shall not be deducted in respect of the assets of a person claiming exclusion from the

definition of sahib-e-nisab under any relevant reasons specified in the Ordinance. The claim for

such exclusion shall be established through appropriate documentary evidence.

xi. Frozen Assets:

The freezing of an asset should be established through an attested true copy of the order of the

competent authority freezing such asset. If and when defreeze totally or partially, such assets

will become subject to Zakat deduction at source from the date and to the extent of defreezing.

xii. A person not sahib-e-nisab:

a) A person claiming exemption from the deduction of Zakat on the ground that he was not a

sahib-e-nisab on the Valuation Date or for the whole of the Zakat year preceding the

Valuation Date should file with the branch an application in writing along with an attested

true copy of the certificate, in form LZ-51, confirming his claim, duly completed, signed

and stamped by the Local Zakat Committee within whose jurisdiction ordinarily he resides,

before the Deduction date.

b) Form LZ 51, prescribed in the Zakat (Collection and Refund) Rules, 1981, requires the

signatures of at least two members of the LZC besides those of the Chairman and that

decision on an application for grant of a certificate on Form LZ-51 or otherwise must be

taken in a meeting of the LZC and a proper record of the proceedings must be maintained.

Any certificate on form LZ-51, not meeting the said requirements must be rejected by the

ZCOs.

c) All certificates on Form LZ-51 filed with the banks or financial institutions, which meet the

requirements mentioned above, will be referred to Central Zakat Administration through Head

Office (IT & OD) for scrutiny and will be accepted for the purpose of exempting the applicant

from compulsory deduction of Zakat from his assets only after confirmation by the Central

Zakat Administration.

xiii. Deceased Person:

Zakat shall not be deducted in respect of the assets of a person deceased on or before the

Deduction Date, the fact of death to be established through an attested true copy of the death

certificate issued by the competent authority.

xiv. Assets in Foreign Currency:

No zakat shall be charged or collected on compulsory basis in respect of any of the assets

mentioned in the First Schedule which have been acquired against payment in foreign currency

are maintained in foreign currency and the return on which, and the value on encashment,

redemption or withdrawal of which, is payable in foreign currency.

xv. Assets Held Jointly

Where an asset is held jointly by a person who is liable to pay Zakat on compulsory basis and

another person who is not liable to pay Zakat or gets exemption from compulsory deduction of

Zakat, if the respective shares of the person are clearly pre-specified, Zakat shall be deducted in

respect of the share of the first person and if not so pre-specified, Zakat shall be deducted in

respect of the whole asset.

xvi. Adjustment of Debt

For the purposes of the computation of Zakat the value of an asset primarily securing a debt

shall be reduced to the extent of the debt, if

a) The debt and the asset primarily securing that debt are in the name of the same person and relate

to the same branch;

b) The asset securing the debt and the asset created from that debt are in the name of the same

person and, are in the custody of the same branch.

c) The asset created out of the debt was so created within three months of the loan having been

disbursed; and

d) The asset created out of the debt is included in the First Schedule to the Ordinance.

e) The extent of reduction allowed in the value of the asset shall not exceed the balance of the debt

as on the Valuation Date.

f) These facts to be established through appropriate documentary evidence.

Deduction of Zakat through BANKSMART

i. Deduction of Zakat

Zakat on PLS Saving Bank Deposits is automatically deducted by BANKSMART System for

which branches should:

a) Flag all those accounts where Zakat is exempted as per 'Zakat Collection & Refund Rules".

b) The flag should be 'Y' for 'Non-Zakatable', accounts in the customer's

fixed detail field through online program.

c) This flagging can be done any time when an account is to be identified as Non-

Zakatable.

d) Zakat option should be processed in Half Yearly Menu, When Zakat program is

executed, following options as explained in para (ii) and (iii) below will be

displayed:

ii. Zakat Exempted A/CsPrinting (Option - 1.)

a) This will produce all the exempted accounts report.

b) Check this report very carefully to ensure that all exempted accounts have been

flagged.

c) This repor can be produced any time when the checking of accounts

exempted from Zakat deduction is required.

iii. Zakat Posting (OPTION-2)

a) This option of the program shall be run on Zakat Deduction Date, the Administrator General

Zakat declares the Deduction Date over Radio, Television and in the Press.

b) While processing option- 2 of Zakat Program, Current Deposit Collection account

number of 'CZF Collection A/C-Savings! Shall be given in the BANKSMART on the

Zakat Deduction date in response to the relevant prompt of BANKSMART system.

c) A report CZ-01 will be generated which should be checked to ensure that no

deduction of ZAKAT has been made by the system from accounts flagged as 'Y'

against option "Non-Zakatable". At this time, system will not actually debit the

amounts to the respective accounts. This report will show the amount of ZAKAT to

be deducted from each Zakatable account.

d) After ensuring accuracy from the First Report (CZ-01) and before the end of day

processing total amount of Zakat deductions as per Report CZ-01 should be manually debited to

CZF Collection A/c - Saving and transferred the same day to Head Office through IBCA for

Credit of Finance Division.

Please note that at this point of time the CZF Collection A/c - Saving will show debit balance

equal to the total amount shown as Zakat Deductions in Report CZ-01.

e) A copy of IBCA along with report CZ-07 (in duplicate) shall be simultaneously sent to IT &

OD for consolidation purposes.

f) During the End of Day Processing, same program (Zakat Program) will be executed

automatically and will ask for option. Please press 2 as a reply for option.

g) The system will now automatically debit the respective PLS saving A/Cs and credit the total

amount of deductions to the collection account 'CZF Collection A/c Savings' as defined earlier.

This account will show a NIL balance after the processing.

h) A report CZ-01 will be re-generated by the system which has to be preserved as permanent

record, after checking and signing.

Please note that BANKSMART System automatically deducts Zakat from PLS SB A/Cs.

Refund of Zakat Deducted in Excess

Refund Applications

There are two types of Refund Applications i.e. Review Applications and Revision

Applications.

i. Review Applications

a) A person from whom Zakat has been deducted and seeks refund on the grounds as mentioned

under "Exemptions", shall file with the branch that made the deduction, within ninety days of

the Deduction Date, an application for review, on form CZ-04, or on a plain paper reproducing

the ground for refund as given in form CZ-04 accompanied by the Zakat Deduction Certificate,

However, a person seeking refund on the ground of not being a sahib-e-nisab may file such an

application for review within one hundred and five days of the Deduction Date.

b) The branch, on receipt of the application for review shall enter the same in the Zakat Refund

Application Register (form CZ-05) and proceed to dispose off the same, within fifteen days of

the receipt of the application and immediately thereafter intimate the applicant, on form CZ-06,

of the decision on the application. A copy of form CZ-06 sent to the applicant must be retained

for record purposes.

c) If on review, the total deducted amount is allowed to be refunded, ZDC will not be returned; if

the refund allowed is partial, revised ZDC will be issued; and if the claim is disallowed in to the

ZDC will be returned in original.

d) Branch Managers are authorized to review applications for Refund of Zakat as permissible

under the "Zakat & Usher Ordinance" & "Rules for Deduction/ Collection of Zakat" up to Rs.

500/- (Rupees five hundred only). All applications based on LZ-51 shall have to be first cleared

from Central Zakat Administrator, Islamabad even if the amount involved is less than Rs. 500/-.

All such applications shall, therefore, be forwarded to Head Office for necessary

clearance/confirmation from Central Zakat Administration.

e) Refund cases beyond the amount Rs.500/- or Revision Applications shall be referred to Head

office, through the concerned Deputy Zonal/Regional Head, where these will be scrutinized, by

a Committee at Head Office.

ii. Revision Applications

a) A person not satisfied by the decision on his application for review may file, within fifteen days

of the decision, an application for revision, on form CZ-04 or on a plain paper reproducing the

ground for refund as given in form CZ-04, accompanied by ZDC (form CZ-03), and an attested

true copy of the decision proposed for revision, with the revising authority as mentioned in the

preceding paras.

b) The revising authority, on receipt of the application for revision, shall enter the same in the

Zakat Refund Application Register (Form CZ-05) (separate Register to be maintained by

Revising Authority) and proceed to dispose off the same within fifteen days of the receipt of the

application and immediately thereafter intimate the applicant, on form CZ-06, of the decision on

his application.

c) If on revision, the deducted amount is allowed to be refunded, ZDC will not be returned; if the

refund allowed is partial, revised ZDC will be issued; and the claim is disallowed, ZDC will be

returned in original.

d) The revising authority may also revise amount of deduction during the same Zakat year if an

error apparent from the record is discovered or within a period of four Zakat years, including the

Zakat year to which the deduction in question relates, if the matter is referred to the revising

authority by the Administrator-General in respect of any patent error regarding deduction of

Zakat discovered through audit or inspection or otherwise. However, where any upward

revision in the deduction of Zakat is to be made as a result of such revision, the person affected

shall be given an opportunity for representation.

e) Where a revising authority decides to change the deducted amount suomoto, the concerned asset

holder shall be informed of the change, on form CZ-06, immediately after the decision is made.

The asset holder may get such an order reviewed by the same authority within fifteen days of

the date of the order.

Exceptional Disposal of Belated Claims

An application for refund shall be rejected by the branch if not filed by the claimant within

ninety days of the Deduction Date, or within one hundred and five days of the Deduction Date

in respect of a case covered by the "Exemptions" as applicable. In exceptional circumstances,

the branch may refer the case to Head office along with its recommendations on a form

specimen for condonation of delay in filing the application for review by a person to whom the

provisions of the Ordinance are not applicable or who is excluded from the definition of Sahib-

e-nisab or who contends that Zakat has been deducted in excess on account of an error apparent

from the record. H.O. will examine the case and may condone the delay in filing the claim for

refund of Zakat depending on the merits of each case provided the claim is received at H.O. not

later than the last day of the Zakat year to which the deduction in question relates.

Limitation on Claims

Except as provided, no claim for refund of Zakat, if filed after the last day of the Zakat year in

which the deduction in question had been made, shall be entertained.

Documents to accompany claims for refund

i. Where an application for review or revision is filed on account of an error apparent from the

record, it shall be accompanied by an attested true copy of the documents, if any, on which the

claim is based.

ii. Where an application for review or revision is filed on a ground stated under exemptions, it

shall be accompanied by the relevant documents mentioned there.

iii. The branch shall issue, on request, a receipt, duly signed and dated, to the person filing the

application and the documents attached therewith.

Refund Applications and Their Disposal

i. Any person claiming a refund of Zakat deducted, on any of the permissible grounds, should

submit a refund application on form CZ-04 or on a plain paper reproducing the ground for

refund as given on form CZ-04.

ii. The refund application shall be termed as "Review Application" & shall be addressed to the

same branch as the Reviewing Authority which had deducted Zakat.

iii. The application shall be duly signed by the customer or his legal attorney or in the case of a

deceased person by his legal heirs.

iv. The application shall be submitted within 90 days from the date of deduction, A person seeking

refund on the ground of not being a sahib-e-nisab may claim refund within 105 days of the

deduction date.

v. The zakat Certificate or the relevant statement of account, if issued, shall accompany the

"Review Application".

vi. If the customer is not satisfied with the decision of the Review Authority he may apply for

revision of his case. This application will be termed as Revision Application and shall be

submitted directly to the Revising Authority,

vii. The branch shall provide the customer the exact address of the Revising Authority while

conveying its decision on Review Application on form CZ-06.

viii. All relevant documents should be re-submitted by the claimant along with copy of Reviewing

Authority's Decision and any further necessary documentary evidence.

ix. On receipt of Refund Application the branch should proceed as follows:

Enter the application in Refund Register CZ-05 in serial order and record the

serial number on the application and all supporting documents.

Check that Review Application is submitted within the specified period is

duly signed by the customer or in the case of a deceased person by his legal

heirs.

The original Zakat certificate and or the original documentary evidence of

Zakat deduction is returned by the customer along with the application.

x. If the refund claimed is within the authority of the branch Manager the case shall be

investigated and the matter should be decided. If the refund amount claimed is more than the

authority of the Branch Manager then the application along with its related documents should be

sent to the concerned Review Authority at H.O. Register CZ-05 shall be maintained for

recording receipt and disposal of refund applications

xi. The applicant should be advised decision on prescribed form CZ-06 within 15 days of the

receipt of application.

xii. Enter the decision and other details in column 6 of Register CZ-05, refund the approved amount

immediately to the claimant and retain the original Zakat Certificate for cancellation.

xiii. For partial refund new Zakat Certificate may be issued to the customer for the net amount

recovered. In the case of Revision Application the Revising Authority shall also maintain a

Refund Register (CZ-05), record all applications for revision. Same procedure will be followed

as for Review Application except that copy of the Decision Advice CZ-06 will also be sent to

the concerned branch for effecting of refund to the concerned person.

Recording/Reporting of Refunds

i. The amounts refunded must be individually entered in the relevant column of the scroll CZ-01

or the Zakat Deduction/Refund Register (CZ-02) as the case may be against the original Zakat

deduction entry. It may be noted that CZ-01 has only one column for zakat refunds but CZ-02

has two columns to record the refunds made for deductions in the same quarter and refund for

deductions made in the previous quarter.

ii. As separate folios are maintained for each quarter in the register CZ-02 there might be some

refund cases pertaining to previous quarter. In order to identify such refunds made after the

close of the quarter in which original deductions were made the amount refunded will have to

be entered in the previous quarter's folio against the respective deduction entries. The cases

subject to suomoto downward revision will also be entered in the Zakat Refund Application

Register (CZ-05) and amounts refunded. In case of upward revision the depositor shall be

advised and the concerned branch shall make the required additional deductions.

Zakat Certificates

i. The Zakat Certificates are security stationary. The supplies of the Zakat Certificates to the

branch are arranged and controlled by the stationary Department in the same manner as cheque

books. Requisitions shall be raised by the branches on the Stationary Department in the usual

manner.

ii. Zakat Certificates will be issued by the branches, only on request, to the persons from whom

Zakat has been deducted at source.

iii. All Zakat Certificates issued by the branches will be issued serially, and the relevant entries

made in the counterfoil.

iv. Simultaneously the number and date of Zakat Certificate issued shall also be entered in the

"Saving and Similar Accounts Zakat Deduction/Refund Scroll" (CZ-01) or the "Zakat

Deduction/Refund Register for Assets Other than Savings" (CZ-02) as the case may be, in the

space provided for this purpose, against the respective deduction entry.

v. All Zakat Certificates will also be signed by the branch manager himself who would also initial

the counterfoil as one of the joint signatories.

vi. Subsequently if that certificate is to be cancelled due to refund, it will be withdrawn from the

concerned party, cancelled, stapled with the counterfoil and retained. An entry to this effect will

also be made on the counterfoil of the original certificate.

vii. No duplicate Zakat Certificate will be issued under any circumstances. If a person, due to loss

of the original certificate, submits a request for a duplicate certificate, the branch manager may,

after satisfying himself, issue a letter certifying that the Zakat Certificate was originally issued

to the party concerned in respect of the deduction of Zakat at source, for which details may also

be provided in that letter.

viii. In case of partial refunds, where fresh Zakat Certificates are issued for the final amount, the

same procedure as for the issue of Original Certificate as outlined above will apply except that

the details thereof need not be entered in the respective columns of forms (CZ-01) and (CZ-02).

Accounting and Operational Requirements

The accounting of Zakat deducted/refunded at branch level

i. Saving Bank And Similar Assets

a) The branches will open the following Current Deposit collection account:

"CZF COLLECTION ACCOUNT - SAVINGS"

b) This account will be opened and will become effective from 1st of

Ramdhan-ul-Mubarak and will remain operative for 3 calendar months from

the date of opening. Thereafter, this account will remain inoperative till the

announcement of the Deduction Date in the next Zakat year when it will

again become operative.

c) This account will be:

Credited with all deductions of Zakat made from the Saving Bank and

similar accounts and, subsequently, with the debits raised against Head

Office for the reimbursement of total refunds made by branches during the

period within 90 days from Zakat Deduction Date.

DEBITED with all refunds made during the period specified above, by the

branches against original deduction of Zakat from the Savings Bank and

similar accounts.

ii. Other assets:

a) The branches will also open another Current Deposit collection account as

"CZF COLLECTION ACCOUNT - OTHER ASSETS"

b) This will be a running account and will be:

Credited with Zakat deductions from all other assets (excluding Saving

Bank Accounts and similar accounts).

Debited with refunds made by the branches against above deductions and

subsequently, with quarterly remittances of funds to Head Office.

Operational Requirements for Saving Bank Accounts

i. The branches having credited the "CZF COLLECTION ACCOUNT SAVINGS" with the

deduction made from Saving Bank Accounts on 1st of Ramdhan-ul-Mubarak shall immediately

remit to Head Office, the total deduction amount DEBITING "CZF Collection Account-

Savings".

As a result of this transfer, the CZF Collection Account-Saving will become NIL.

ii. The branches shall at the same time prepare Zakat Deduction/Refund Summary Report (CZ_07)

and this report shall be dispatched in duplicate to IT & OD, Head Office immediately without

any delay,

iii. IT & OD at Head Office will Consolidate Reports (CZ-07) for all the branches and

telegraphically advise the total figures to Central Zakat Fund, Islamabad.

iv. As at close of the business (90 days after Deduction. Date) the branches will advise Head

Office, through Fax the total amount refunded against Savings Bank Accounts deductions

during that period.

v. Finally, the branches will on the close of business on 90th day after Deduction Date, prepare the

Report for the total amount refunded by them during that period. Since all refund claims against

Savings Bank Accounts MUST have been already settled by that day, no further debit entry

shall appear in 'CZF Collection Account-Savings' after that date.

vi. On the basis of these figures the Head Office will arrange to pass the credits for the equivalent

amount to the respective branches through IBCAs.

Operational Requirements for Other Assets

i. The remittance of Zakat deduction less refunds in respect of other assets (excluding Savings

Bank Accounts and similar accounts) and the submission of reports in respect thereof will be

based on quarterly cycles as mentioned on Report CZ-07.

ii. On the last day of each quarter i.e. 31st March, 30th June, 30th September and 31st December

the branches will close the folios of the "Zakat Deduction/refund register For Assets Other Than

Savings" (CZ-02) for that quarter and total the relevant columns, prepare CZ-07 columns.

iii. An IBCA for the balance of "CZF Collection Account-Other Assets" will be raised as at the

close of the business on the last day of the quarter: -

CREDITING "Sundry Creditors CZF Consolidated Collection A/C"

DEBITING "CZF Collection Account - other Assets"

iv. The IBCA along with the original Report (CZ-07) in duplicate will be dispatched to Head

Office by courier service.

v. Information Technology and Operations Division at Head Office will consolidate all Reports

(CZ-07) pertaining to the branches for onward submission to SBP and Central Zakat

Administrator.

Filing.

Branches are advised that all documentation regarding Zakat Exemption / Refunds etc must be

properly signed and the respective files shall be kept safe under dual control of the In charge

deposit department and the Branch Manager.

Accounts at Head Office

i. A Consolidated Central Zakat Fund A/C shall be opened and maintained at Finance Division

H.O. only under Sundry Creditors - Consolidated Zakat Collection A/C.

ii. All fund transfers received from branches shall be credited to this account. Any claim of

branches or account of debit balances in the branch collection account due to refund shall be

made good by debit to this consolidated A/C.

Deposit of Funds with SBP

Immediately after the receipt of funds for Zakat deducted at source on 1st of Ramdhan-al-

Mubarak by branches and subsequently at the end of each quarter the entire balance

accumulated in consolidated CZF shall be deposited by Finance Division, HO with State Bank

of Pakistan, Rawalpindi through form CZ-08A in triplicate under the Head "Central Account

No. 8 - Central Zakat Fund." Fourth copy of the form CZ-08A will be simultaneously sent to

Administrator General - Central Zakat Fund - Islamabad.

Returns to Be Submitted By Branches

After deduction of Zakat at source on the Zakat Deduction date for PLS Savings and Similar

Accounts as declared by Administrator General Zakat and for each period as specified on the

Form CZ-07/08, the return shall be prepared in triplicate, Two copies shall be sent to Accounts

Division, Head office and the third copy shall be retained as branch copy.

Zakat Paid Voluntary and On Self-Assessment Basis

Zakat voluntary when designed to be paid by any individual or organization within or outside

Pakistan into the Central Zakat Fund Account, will be credited through crossed cheque, local or

outstation, demand draft, bank draft, pay order, postal order or cash in any branch of a bank

operating in Pakistan, a post office, a National Savings Centre or an office/branch of a financial

institution accepting deposits.

The bank/office receiving the financial instrument will, after realizing the cash, issue a receipt

to the depositor on form CZ-25. Carbon copy of this receipt will be retained for the record of

the bank/office. This receipt will serve as the Zakat Deduction Certificate for claiming

exemption from Income Tax. No duplicate of this receipt shall be issued.

The bank/office will keep a record such receipts in a register on form CZ-26.

Immediately after the close of each quarter, bank/office will transfer the amount collected

during the quarter to its head office along with a return on form CZ-27.

The head office of the bank or other institutions, which is also a Zakat Collection Controlling

Agency, after consolidating the amounts received from its branches/subordinate offices, will

deposit the same through challan on form CZ-28 in its nominated office of the State Bank of

Pakistan. This amount will be deposited under the head 'Central Account No.8-Central Zakat

Fund’, Three copies of the challan will be sent to the State Bank of Pakistan office, which will

return one copy after endorsing receipt of the amount, and the fourth copy will be sent

simultaneously to the Central Zakat Administration.

The ZCCAs are also requested that a brief procedure to be followed for voluntary and on self-

assessment basis (Account) may be affixed on a prominent place in broad capital words and its

Urdu version in all the banks/offices regarding the deposit of Zakat voluntary and subsequently

to be credited into Central Zakat Fund Account No. 08 for the guidance and education of

general public who are willing to deposit it on self-assessment basis.

Preparation of Zakat Collection Report - CZ-07/08

In order to correctly prepare the above-mentioned Form CZ-07/08 the branches should report

the information as mentioned below:

i. RETURN SERIAL NO: This number shall be in a consecutive numerical order and shall

not change/break with the change of year.

ii. ZCO CODE: This shall be branch code number.

iii. ZCCA CODE: ZCCA Code Number allotted to our bank by Central Zakat Administration.

This code shall be mentioned in this column,

iv. Period: Number of Period under Report as given in the box on the extreme right hand side of

the Form CZ-07/08 should be given here.

ZAKAT RETURN - PART A: TOTAL ASSETS AS ON THE VALUATION DATE

Total Assets On Valuation Date

Asset-wise balances of the relevant assets according to the statement of affairs as on 'Valuation

Date' to be reported against the relevant codes. Please note that total balances of ABCs

outstanding as on 'Valuation Date' shall be reported against Asset as the profit on such assets is

payable periodically whereas term deposits shall be reported against Asset because the profit

thereon is not paid periodically but on maturity. These figures will remain constant throughout a

Zakat Year for all reporting periods.

Total Exemptions

Total exemptions with number and amount for each category of assets as mentioned in Part 'B'

shall be reported here.

TotatZakatable Assets

Asset-wise figures of total Assets on Valuation Date less exemptions shall be reported in this

column.

Zakat Recoverable

2.5% of the balances of Zakatable Assets to be mentioned according to Asset Codes.

Zakat Recovered

Actual amount of Zakat recovered shall be mentioned here.

Total Refund

Total Refunds, if any, made during the quarter under report to be given here against the relevant

a/c codes. These figures shall be the same as reported in 'Total' column of Part C of the Form.

Previous Year's Zakat Recoveries

Any recovery pertaining to previous year's Zakat shall be reported here.

ZAKAT RETURN -PART B: EXEMPTIONS DURING THE PERIOD UNDER REPORT

Non-Maturity Balances Previous Quarter

Non-maturity balances of the relevant a/c codes as of previous Zakat Quarter will be reported

here. However, no figures against A/c shall be given in this column. The figures reported under

this column shall not be added in figures of other columns of Part 'B' which means that while

totaling all other columns of Part 'B' figures reported under this column shall be simply ignored.

Non Muslim or Non Pakistani

No of a/cs and their amounts on which exemptions for this reason allowed will be mentioned

here against each relevant account code.

Non Sahib-e-Nisab

Total number of accounts & balances thereof of Asset holders excluded from the definition of

Sahib-e-Nisab as per Zakat &Ushr Ordinance and those account holders who submitted LZ-51

approved by Central Zakat Administration should be reported under this column against the

relevant account codes.

Due to Fiqh

No of a/cs and their balances against which exemptions allowed due to Fiqh should be reported

here.

Non-Maturity

Assets which have not matured or have not been encashed by the end of the period under report

have to be reported here (This is not relevant for saving & similar accounts as such no figures

under this column to be mentioned against account.

During the Zakat year the assets which mature are encashed will be shown in part A as

zakatable Assets and correspondingly will not be shown in exemption column, if Zakat is

deducted on them but will be shown in the relevant columns of Part B if exemption is allowed-

Other Reasons

i) No of accounts and the sum total of their balances which are below the amount declared

Zakatable by the Central Zakat Administration, Islamabad. This exemption amount (minimum

balances on which zakat is recoverable) is only applicable to assets falling under A/c.

i) No of accounts and sum total of their balances on which exemption allowed for reasons other

than those mentioned specifically, for each account code.

Total

Total number of accounts & their reflective balances, against each a/c on which exemptions

allowed for any of the specified reasons. However, balance and nos of a/cs mentioned under

column "Non Maturity Balance Previous Month' should not be included in the totals.

ZAKAT RETURN - PART C: REFUNDS

All refunds made to account holders during the period under report shall be mentioned against

each relevant account code, giving no of accounts & total amount refunded there against, under

the respective columns according to the reason for which refunds made and the totals of

accounts involved and the refunds made should be reported asset code wise under total column

in Part C.

NUMBER OF COPIES

The above-mentioned Form shall be prepared in triplicate. One copy shall be retained by the

branch and two copies, duly signed and completed in all respects, shall be sent to Information

Technology and Operations Division Head Office, immediately after the last day of each

reporting period.

CZ-09: ANN UAL STATEMENT REGARDING ZAKAT UN-REALIZED

This report shall be sent to Head Office along with the last Zakat collection report (CZ-07) of

the Zakat years.

RETURNS TO BE PREPARED/SUBMITTED BY HO.

i. Information Technology and Operations Division at HO shall consolidate in quadruplicate the

reports CZ-07 received from the branches at the end of each quarter and submit consolidated

report on Form CZ-08A, in triplicate to State Bank of Pakistan.

ii. One copy of the consolidated report shall simultaneously be sent to Central Zakat

Administrator, Islamabad along with one copy of CZ-07 submitted by each branch for

consolidation purposes at the CZF.

These instructions are extract of PPCBL Manual on General Banking approved by the Board, not

adherence by the branches and concerned divisions will cause serious consequences.

With very warm regards,

Aamir.A.Khan,

Head of Operations.

Cc:President Office, PPCBL, Head Office, Lahore.

All the Executives / Head of Division, PPCBL, Head, Office.

All the Executives / Zonal Heads, PPCBL.

All the Executives / Dy.Head Ops PPCBL.

All the Staff members of MIS Wing, PPCBL.

All the Officer Banking Operations / BOM’s and operations staff.